Skip to main content

tv   Fast Money Halftime Report  CNBC  July 24, 2013 12:00pm-1:01pm EDT

12:00 pm
we know how long that cycle went on after hitting that low. we could have a couple years here? >> yeah. meantime, dow is hanging in there despite being dragged down by caterpillar. we have a lot more big earnings tonight. the facebooks of the world. we'll see what happens this afternoon. let's go back to headquarters. scott wapner and "the halftime." guys, thanks very much. welcome to "the halftime show." four hours until the close. we walk to the wall and see where we stand. it's somewhat of a down day. dow is kind of hanging in there. dow is down 17. s&p negative, nasdaq the standout. here is what we're following. blue chip bonanza. small caps keep stealing the spotlight, but are america's biggest companies the best place for your money? game on. zynga has been red hot but with earnings looming, is it time to bet the farm on the stock in two brothers and one big debate is just ahead. first, our top story, apple surprises the street with
12:01 pm
stronger than expectedity phone sales. the stock is up. with just about everyone writing this company off, is the worst now over? we're trading apple and all of the big movers of this day with pete najarian, simon baker, jon najarian and stephanie lynx. you have been making the argument apple is a second half story. did you see enough? >> we certainly have seen at least part of what we wanted to see which is the iphone sales. i think jon will touch on something he's been hitting over the last couple weeks. they have been discounting a lot of prices. that's one of the areas they got hit. they brought down prices but they hit record numbers. ipad a little disturbing. that came down a little further than i think most everybody expected but the iphone has been the fuel behind this jet as it's moved to the upside. we've moved very nicely. if you go back to where we closed out june, $396. we're pushing that $440 level, now around $443. i still think they have to give us what we need, which is going
12:02 pm
to happen in the next quarter we hope, which is going to be something to do with the format of these phones and obviously the format of some of the ipads, some of the refresh, the ios 7. they've still got to deliver. we're still waiting on that, but i think mr. oppenheimer gave us at least enough to be excited. >> you said you haven't seen enough to confirm it's a second half story. do you want to get ahead of the curve or behind the curve -- >> i'm in the stock. i bought the stock. i have added to the stock. i added to the stock even today in the form of some of the options because of what i'm seeing in the options which is the expectation that they are going to be able to deliver. will they be able to deliver? right now it's still the expectation. >> doc? >> well, i liked what i head out of apple, but as you know i'm waiting for that larger formatity phone. i thought it was good news but it's just in the rumor stage still that they're testing according to "the wall street journal" larger format iphones. i think if they do that, then that's the must-have device. you've already seen that
12:03 pm
samsung, which hasn't benefited from that lead position, their stock is down 16% as well. so you put apple up against samsung this year, and samsung is a more diversified company, of course, but they're not hitting it as hard as you would have been told by a number of pundits that they are hitting it. they're not. this iphone is still one of the most popular devices in the world, scott, and to pete's point, second half story, they get a larger format iphone, a china mobile deal, this stock can result. >> they're going to get higher expectations. there were zero expectations going into the quarter. >> yeah. >> the only quarter that i can remember in any sort of recent history where everybody said who cares? it's going to be a bad quarter, turns out it wasn't. zero expectations going in, now bigger expectations coming out. you better come with a phone or some device before the end of the year. >> this stock could go to $500 but until they come up with some type of innovation, nothing is going to happen.
12:04 pm
we can talk about a bigger screen, the 5s which is sort of evolving but unless they come out with some innovation, the stock won't go above $500. the stock is down 40% from the high. expectations are a little higher. we've got to see innovation because that's what apple is about. we haven't seen it for a number of cycles. >> stephanie, is the worst over for apple? can you make that statement at this point with confidence? >> i think the gross margin concerns are probably bottoming because that has been my biggest concern. gross margins have been falling and they still fell this quarter year-over-year pretty substantially, but the guidance for gross margins for the next quarter is actually around where people were expecting and a little bit better than the whispers. to me that speaks to me doing better job in this transition. these are transition quarters. until we get these products they're talking about, these are transition quarters. so they're doing a pretty good, yes on the iphone. 20% better expectations in terms of unit. despite the fact they had a 5%
12:05 pm
asp drop. so they're doing better there. they're doing a little better on the gross margins. i think it was component prices that helped them. if these things can stay at these levels and you get some confidence in products in the second half of the year. i think it's a trading range stock though until -- like all of us are expecting until you get more visibility on the products but you're going to want to buy it ahead of the products. >> that's what i'm talking about. if you want to buy it ahead -- simon and pete, that's the question. is it early? if you don't have a position in apple, is it too early to buy this stock? >> i don't think so because of what peter oppenheimer told us. he said it's going to be a busy fall and busier 2014. what he's telling you is we're like a drug company. this is our pipeline. because he's excited about it, that gets me excited about it. i think they actually are going to address a lot of the issues -- >> you have to wait until october -- >> if you wait you're going to miss it. >> i'm not saying to buy it in october but i think we have a lot of time between now and october. there's a lot of time to buy it.
12:06 pm
you don't have to chase this thing up $25. you can wait for it in the low 400s or under 400s. >> you favor tech. if you favor tech in the second half, you have to have apple as part of your portfolio. >> i think much of tech has given you real reason to worry whether it's going to be the play in the second half. there have been a parade of people who have said tech is the place you want to be and then you get microsoft laying one big fat egg, intel laying a big fat egg. people found some better things in google's report than some others did because the jury is still out. >> look at some of the stocks. ak ken -- accenture is up, oracle is up. if you can buy the dips, that's been interesting given the cash flow and the valuation level. >> look at the -- you're seeing vmware up. vviv running. there's a reason for this and
12:07 pm
it's that the cost cutting is over for this space. now they're back to reknew growth and acceleration in here. some of the things where government holdbacks and now that's over. >> can you imagine when i.t. spending actually comes back what these stocks can do. these companies are doing these things with no i.t. spending or no business investment happening. >> straddle in apple yesterday was $20. that's one of the cheapest i have seen since this thing had a triple damage jit handle on it. it moved 24 bucks so far today. >> the strategy has been when you have the dips like vmware and google, move in. >> let's do this. let's brick in ong in steve fro. nice to talk to you today. >> likewise. >> i know you have heard the debate here on the desk. you remain positive on apple after these results. >> i do but i agree with a lot of comments that were made. clearly the company is not out of the woods. we do have a $500 price target. i think it's a trading stock. the quarter was better than expected with both revenue and
12:08 pm
margins at the higher end of the range, yet there's still a lot of answers that we need to really believe that this is a stock that's going to take off. >> what do we make of the average iphone prices dropping? >> well, you saw 31 million units, which was a surprise. even more surprising is the fact that there was a lot of strength in developed markets. u.s. and uk up 50%. japan up 66%. so that suggests not everybody has a smartphone after all and/or apple is gaining share. however, the company did very well in emerging markets where it's tending to sell the 4 and 4s. that's depressing thea sp. asia was a bit weak. we believe asia is critical to future growth. that was a little soft. we would like to see that come back. >> there was a point not that long ago where china was a real bright spot specifically speaking to that country. what do you make of that? if it remains somewhat slower going forward, does apple have a real problem? >> it will. tim cook made the point that we
12:09 pm
can't judge it based on 90 days. this is a long-term view that the company has in china, specifically hong kong was weak for undetermined reasons, but this new kind of midrange phone that comes out could very well bolster their capabilities in china, and we expect that probably in the october time frame. so these new products both the tablets and the phones i think will be interesting. they're not going to be break through products. the real question is what comes next year? are there new product categories which the company does allude to. >> steve, in china you think it's the lack of product that they had to offer there or do you actually think it's competition from htc and samsung? >> i think it's a combination. it's certainly demand related, the fact the economy is a little soft there. android is much stronger in asia than it is in the western world and there's a lot of competition there. at the same time i do think that apple is still an aspirational brand. if they can bring in newer product at similar price points to the 4 and the 4s, that can be
12:10 pm
very attractive. we're still waiting to see if they hook up with china mobile. that would be significant to apple's earnings. >> what product can we bank on at this point? 2013. i know you mentioned new product categories for next year. there are a lot of investors who are banking on something, something exciting, something substantial in calendar year 2013. >> well, what we think we know for the balance of the year is that there will be a midrange phone which we believe is now moving into production, and the 5s, both four inch form factors. no change. that would be september/october. we expect a larger ipad refreshment and then a mini retina, the smaller ipad perhaps later this year or early next year. >> you're telling me there's not going to be a bigger screen iphone coming in 2013? >> i don't think so. i think 12 to 24 month development cycles for apple. i think they got caught by the demand for so-called fablets. if there is one coming, i think
12:11 pm
it will be no sooner than mid next year. >> do you think that $500 price target holds up to that disappointment? >> i think so. expectations are low but i think it's the new products next year which could include a watch, a pen, tv, who knows. maybe some new services as well. nobody talks about the services but they're doing about a $17 billion run rate in itunes and other services which are fairly profitable. so i think we can get to $500 based on what we know today, but to go higher we have to see major new product wings. >> give me your quick thought on the dell saga, where it comes from here from a company standpoint regardless of whether it's icahn or michael dell and silver lake snp. >> dell is going through a significant transformation. it turns out it's harder to become an enterprise company than fix one. i think michael dell is appropriately recognizing he has a lot of investment to make. maybe that's made better as a private company. within the next few weeks
12:12 pm
investors will decide. >> are you confident this company can rebound? >> no particularly. i think the pc side isn't going to rebound much. . the enterprise side i think has a chance. it's an uphill battle but it will take a number of years for that to play out. >> thanks for spending some time with us. >> thank you very much. >> let's trade the ecosystem. broad com is having its weakest leaving since december 2011. qualcomm the stock that everybody likes -- >> everybody but steph. >> we had a bull/bear argument. >> she's been right. everybody loves -- >> it's up a little since then. >> it's flat. >> everybody loves qualcomm. >> yeah. >> it needs to be a show-me story at this point. >> it does. and if broad com getting all these down grades and you move the number of iphones you did, i think that bodes well for qualcomm into the earnings report.
12:13 pm
>> i think their revenue royalty rates are clearly declining and for me i have a hard time modeling out earnings power based on that. so that's why i'm going to make it up on the stock. >> ford raising to its highest level in 2 1/2 years and when we come back, the automaker's cfo will join us in an interview you will see first on cnbc. later, facebook is set to report after the close. will zuckerberg tell investors what they want to hear. we'll have your winning facebook trade when we come back. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
12:14 pm
12:15 pm
12:16 pm
welcome back. shares of ford are up 3% after the company delivered a solid earnings beat. company also raised its guidance and sales rose by 15% year-over-year for the second quarter. let's go to cnbc's phil lebeau in chicago for more on that. phil? >> scott, we're going to bring in bob shanks, the cfo of ford motor company from dearborn, michigan. when we look at the numbers for the second quarter, up all over the world, but there's no doubt that north america was driving the results. how much of this is because of trucks and the demand there and how much of this is about overall sales in north america? >>. you're right, phil. we just had a great quarter. we're thinking about improvement across all parts of the business and solid momentum moving forward. north america, as it has been the last number of quarters, was a big driver of that. and we're seeing strong performance in the full-sized pickups, but we're also seeing
12:17 pm
strong performance in the super segment vehicles, our smaller vehicles, fiestas, focus, escape, fusion. a new entry that's given us along with some of our other electrified vehicles a 12% increase in that segment. we're seeing improvement across all parts of north america and all parts of our business globally. it's behind a really great quarter. >> on the conference call with analysts today, coo mark fields was very blunt saying we probably left some sales on the table in north america. you have got seven of your nine plants in north america running at capacity. three shifts. hard to squeeze much more out of them. do you need to add capacity in north america and if so, where? >> well, we actually did announce today we're adding 200,000 units of capacity and with that we're bringing in more and more jobs, and that was focused on kansas city and in
12:18 pm
flat rock. you know, i think having this kind of really tight balance between capacity and demand is one of the secrets of the success that we've had not only this quarter but in the past few quarters and clearly we are working to improve the capacity situations so we can meet that customer demand. >> how much wiggle room do you have? because i think a lot of people look at this and say how close are you to the edge where you need to make a major investment in terms of either adding some type of a line at one of your facilities or doing something more significant than that? >> well, we're bringing on a third crew in kansas city for the "f" series. we will be adding a production line and second shift in flat rock. we have a little bit more opportunities beyond that. one of the key things that's so fantastic about the one ford plant is we can service any market in the world with the capacity we have all over the world. we've got opportunities outside the united states as well. >> bob shanks, cfo of ford motor company joining us from dearborn.
12:19 pm
scott, this will be a story a lot of people are focused on not just with ford but the other automakers. your capacity, if you will, in north america. it is getting tighter and tighter and right now it's not a problem, but you look over the next couple years, people are going to start asking that question more frequently. back to you. >> thanks, phil. they're definitely focused on what the stock and not just ford but general motors and toyota have also outperformed. a gentleman by the name of paul tweets to you guys, he's been long ford for a long time. buy more on the earnings or bail? >> i have been buying the entire way out and now i'm start to trim off some of it. the options that everybody were coming after over the last month and a half, two months, they were coming after the 15s, then the 16s, and up to the 17s but that's kind of where it stopped. when you look at it today, we had september 16 call buying, today it's $1.50. >> we have been talking about buying the autos for a while. look at the dealership, sonic,
12:20 pm
carmax, those types of names doing well. >> what does not think it's time to take some off with ford? pete says take some off. >> i wouldn't. i think there's a lot of upside in china and in south america. not only in north america but -- >> what about europe? >> europe turning certainly. what's important is that the company continues to cut costs so you can see positive operating leverage as these other markets start to turn. but i would say one name i always like and i always talk about is borg warner. a 12% customer is ford and the top five customers are very, very strong in their fields and they're gaining share as well. you want to look at the parts companies. that's going to lift i think the group. so i don't think you need to sell today. >> economic output strongest in 18 months in europe. that bodes well for the recovery you're talking about to europe. i think they will see a big surge. it's never dumb to take money off the table. you have had a great run. i'm not saying you get short. i'm saying you take some off and
12:21 pm
wait and reload or put on an options trade. >> maybe you don't get another chance to reload. that's the thing. if you get china -- >> this one moves -- >> -- bottom. maybe europe not only bottomed but picks up as some said on this network. europe is back i think. >> france and germany coming back as strongly as this latest report just today indicates means that he could be very right. >> market share for ford is very low in the outside countries so there's a lot of upside just from them taking market share even if the industry stays flat. >> a quick comment on toyota. this company that's been taking advantage more than maybe any other, sorry, on the weaker yen. do you got a play on that? >> just to go back to ford and back to toyota, just on ford, sorry, but it's a great way to play the housing play on the trucks. we continue to see momentum with the sales we saw outcoming. on toyota, i don't know a lot
12:22 pm
about that one. >> okay. who does? >> i have been staying away from it because -- >> why? >> so much of the exposure here, scott, isn't yen denominated, it's dollar denominated in the united states and that's one of the dangers of putting the plants there. that's why they put them there. if they're not making them where it's cheaper, they're building them here, the cheaper yen for those kinds of exports isn't -- >> nobody owns toyota on the desk? >> no. >> no. but i think if the yen continues to be weak, they will continue to do well. if you believe in japan, which i do, i think that's a play, too. >> let's move on to an earnings loser. caterpillar is the worst performing stock in the dow after reporting weak revenue and profit margins. here is what the ceo had to say earlier about how the company is dealing with the down tourn in mining. >> our operational pull through is good and solid. we know the cycle will end. when we come out, we'll be lean. we're doing a lot of cost reduction. taking advantage of that to do tuning and tweaking.
12:23 pm
making sure we're lean and mean. >> the question for the desk, okay, has the company or management given you any reason to buy the stock? to own the stock? >> i didn't feel like he defended -- >> to like the stock. >> after what we'd heard from chanos last week with you at the alpha conference, i did not hear enough today from the ceo to tell me, hey, look, water is fine you ought to jump in and here is why. he really didn't give that you say criteria. >> a think a stock in the low 80s, there's support. that's why i like it. there's been several debates. you buy it in the low 80s, the yield at least gives you support. i think the inventory drawdown by the company of $1.2 billion, that's now completed. that sets you up for a little easier comparison going forward, but in terms of top line revenue growth, it's going to take time. >> low 80s, you got low 80s. you got 83 and change. >> 81 is where we debated it. 87 i said i wouldn't be chasing
12:24 pm
it. i think you have to trade around it until you get more confidence in the top line. >> to stephanie's point, the positive was on the inventory draw. i think you want to own this stock in 2014, not 2013. i think you need another quarter and then own it. >> we mentioned broadcom. it's a drop. lowest level since december of twc 20 2011. >> and they have slammed it. i think at these levels i think the selling pressure has pushed it so low it's now an opportunity but they have competition. >> doc, the read on polycom. >> just a horrible quarter. it's falling off a clifer right here with some big misses and down grades. i think you stay away. >> steph, electronic arts with a pop. >> really good quarter, revenues and earnings. the most important thing was expenses and basically --
12:25 pm
someone is talking in my ear. sorry about this. in terms of the quarter it was good. but expenses, their guidance on expenses is what people are excited about. >> welcome to my world. panera, simon, drop. >> i like the restaurants. unfortunately, didn't like the earnings. they missed. choppy spending long term. i think you let it settle in, down 7%, 8%, i think you own it. next up, should you bet the farm on zynga. shares are up big in 2013 but one of our traders thinks it's game over ahead of earnings. it's brother versus brother. a showdown you cannot afford to miss. we'll be right back. ♪ that's me... i made you something. ♪
12:26 pm
i made you something, too. ♪ see you next summer. ♪ [ male announcer ] get exceptional values on the highest quality cars at the summer of audi sales event. ♪ at the summer of audi sales event. i've been doing a few things for playing this and trading.ove-- tdd#: 1-800-345-2550 and the better i am at them, the more i enjoy them. tdd#: 1-800-345-2550 so i'm always looking to take them up a notch or two. tdd#: 1-800-345-2550 and schwab really helps me step up my trading. tdd#: 1-800-345-2550 they've now put their most powerful platform, tdd#: 1-800-345-2550 streetsmart edge, in the cloud. tdd#: 1-800-345-2550 so i can use it on the web, where i trade from tdd#: 1-800-345-2550 most of the time. tdd#: 1-800-345-2550 which means i get schwab's most advanced tools tdd#: 1-800-345-2550 on whatever computer i'm on. tdd#: 1-800-345-2550 it's really taken my trading to the next level. tdd#: 1-800-345-2550 i've also got a dedicated team of schwab trading specialists. tdd#: 1-800-345-2550 they helped me set up my platform the way i wanted, tdd#: 1-800-345-2550
12:27 pm
from the comfort of my home. tdd#: 1-800-345-2550 and we talked about ideas and strategies, one on one! tdd#: 1-800-345-2550 really gave my trading a boost. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 after all, i'm in this to win, right? tdd#: 1-800-345-2550 open a schwab account and learn how you can earn up to 300 tdd#: 1-800-345-2550 commission-free online trades for 6 months tdd#: 1-800-345-2550 with qualifying net deposits. tdd#: 1-800-345-2550 call 1-888-254-2600 today. tdd#: 1-800-345-2550
12:28 pm
welcome back to the halftime report. i'm jaiosh lipton. vmware moving sharply higher. an earnings beat. the company raises the top end of the full year revenue.
12:29 pm
street responding, bernstein raising their price targets. also emc higher today as well benefiting from vmware. revenue just better than expected. scott, back to you. >> josh lipton, thanks so much. pete, emc, steve, vmware. >> i like the name, like their involvement with vmware. when you look at the regions they did well in, that's going to flow down toward emc. i think the name goes higher. >> vmware's books were up 20%. people were not expecting that. this thing is down 17% since january. it's trading at 20 times earnings. i think this stock can continue to work. >> zynga is set to report second quarter earnings. this will be first time wall street will hear from the new ceo and his strategy for turning that company around. shares jumping 37% this year but will earnings derail that rally? we debate it brother versus
12:30 pm
brother style. jon is the bull, pete is the bear. 1:30 on the clock. doc, make your case. >> no long-term debt, pete. that $1.7 billion in cash they have on the balance sheet, that is huge because the stock trades at a market cap of $2.6 billion. they're not giving them any credit for basically the upside potential here. the annual revenue is about $1.2 billion. they just added john dorr from cliner perkins to the board. that's huge for these guys because they don't make big mistakes. i think he's on there to help turn this thing around. that and the fact you have microsoft, the guy from xbox on here, i think that's huge. i would be buying this thing and am long this stock right here. >> you know, they have had declining revenues. when you look at the name, they adduce it on a boat load of cash. they're getting all the credit they deserve because they don't deserve any credit. they're basically trading at what they're worth. they've got to start figuring out a way to get this monetized
12:31 pm
prorm. obviously getting into mobile, i do think they have the proper ceo in place. it's going to take a lot of quarters. i think further down this name has some potential to the upside. i think right now you have a pullback potential back to the 2.50 level. when you look at the margins. their margins are phenomenal. i think that number will have to come down. when are they ever going to earn money in they still have yet to do it? >> they have 160 casino games that they're playing with right now without real money in great britain. those are going to go live in real money fashion, farmville slots, and i know that sounds like a joke, but people loved those games when they were just jerk around games. when you can actually play them in a casino fashion, those huge revenue. >> they deserve no credit, pete? >> they've never made money. this is a company that cannot make money. they're trading exactly what they are which is basically book value. >> who made the more compelling
12:32 pm
argument? >> i don't want to get in between two brothers. i got to go with jon. purely from a valuation perspective they are getting no credit. i think the gambling is a game changer. if they execute on that, the stock could be a $10 stock. >> that's a big if. >> they are doing it now though. this is in the paper trading, if you will, stages in great britain right now, but they are 30 days or so away from launching this and that's going to be huge in great britain and it's going to be here, too. >> we're always at the forefront of things over there. you know that. >> new and more let's just call it what it is a new and more perhaps credible ceo potentially counts for a lot. >> absolutely. but isn't that priced into the stock. it's up 38% year-to-date. a lot of that coming recently. this was a $2 and change stock at the beginning of the year. i think you can get it cheaper to the down side. >> tell us who you think won that debate. tweet us @cnbcfastmoney.
12:33 pm
treasuries are in trouble today. the ten-year note drops to a one-week low. lets get more from josh lipton. >> with today's bond drop, the ten-year yield is ticking ever closer to a two-year high. rich at the cme, what's behind today's bond weakness and can yields only go higher from here? >> well, listen, josh, i think we put in the low. if you look at the 2.48% level as a support in yield, we get better housing data, take a look at the three-month chart. a picture is worth 1,000 words. we see a well-defined down trend. we bounced off our lows in the ten-year note on the 8th all the way back up to highs yesterday. we hit that trend and failed. now i think we're developing a trend. i'm playing the yields from the long side or i'm selling the ten-year notes. i think equitying will test
12:34 pm
higher up. we get out of the yield price and i think all bets are off. >> anthony, you heard rich. at what point will bond yields start to drag on stocks? >> well, so far, josh, we've done pretty well. if you look at what the 30-year mortgage rate has done over the last month and housing numbers that came out this morning, the market seems to have absorbed it pretty well at this point. but rich points out a good point. that 2.7, 2.75, if we start trading above that, that's the reason i said we start trading above that, then you have to start watching out. >> thanks to rich and gris. check out the futures site. we have trader blogs and hot d videos you won't want to miss. scott, back over to you. >> josh lipton. coming up next, boeing touching all-time highs but could there be turbulence ahead? we'll give you the trade. plus, buy, sell or hold facebook ahead of numbers.
12:35 pm
with more than 40 years experience of investing, porter bib will give you the play. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.
12:36 pm
[ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
12:37 pm
12:38 pm
let's make the turn with our top three trades. a special edition. first up, boeing. all time high. the aircraft maker playing on better than expected earnings. it's gone negative, the stock is down 1%. >> when you look at the new orders, across the board this was a kill 1235as far as earnin. it was $106, dropped towards $100, dipped below that and then it's all the way back up this morning. trading above $110 in the premarket. i think this is a great name. i think they're doing everything right, doing great with the margins, but you could wait for a pullback. i think closer to $100 is the time to get back into boeing. >> what about the so-called blue chip trade? we talk about small cap stocks
12:39 pm
that keep hitting new highs. the russell has exploded this year. in earning season the a lot of dow stocks have absolutely performed. you want to get into some of the names, whether it's ge, boeing here, too? >> i would actually take ge on the pullback it's had after it reported a really good quarter and better margins. i have been a big bull on the aerospace cycle. utx shines because they have the goodrich deal coming. on pepsi, i thought it was a fine quarter. the stock is up 25% year-to-date and it trades at a significant premium to its historical averages. i think a lot of that is because you have the activism in it number one, and they do have good products. i just think that there's other places you could put your money with better value. >> you still to your point, you have this peltz hangover, right? it was like a week ago today that he raised this idea regarding pepsi and mondolez. >> it doesn't sound like it's going to happen but who knows.
12:40 pm
it sounds like coke is the better value than pepsi at this point. >> doc, steph was mentioning defense. we have seen big strength there. northrop grumman up nearly 3%. >> maybe we can get another sequester going so they can set new 52-week highs again into next year. look at the performance out of the defense stocks. you have northrop grumman and oc. they blew out the numbers and then they guide significantly higher. same thing with general dynamics. same thing with lockheed martin. you look across the board, you can throw boeing in there as far as derivative plays. i think every one of them is hitting 52-week highs today. as far as sequester and what it meant, these guys are knocking it out of the park even with sequester. >> facebook sure to be one of tonight's most closely watched earnings reports. porter bibb joins us on set with what you should be looking for. what are you going to be looking
12:41 pm
for? >> i'm looking for a decline in advertising revenue and not much else. he's going to be talking a little bit about graph which is their killer advertising metrics provider that they haven't really capitalized on yet. >> you sound really excited, porter, about this quarter. >> you asked me what i'm looking for. look, the volume has disappeared on facebook trading, and zuckerberg has got to step up. he hasn't really told anybody anything that's going to capture attention. >> yet, i have guys sitting next to you who continue to like the stock. >> yeah. i think it's got good momentum. i think -- >> when do you think it's going to get back up to its ip o price? >> i mean, i didn't own it at the ipo, but i think hitting thei po price is where the easy money will be made. i think there's momentum coming. i think you will see the buyers -- >> why such a difference of opinion here? porter says that they're not -- they're not doing enough.
12:42 pm
they haven't proven you anything, and yet you continue to support what you think this company is doing. >> i disagree. i think they have proven it already. they have gone from zero to what's the number in terms of ad sales over the last quarter? 450 million. >> when you walk around with a critical mass of $1.1 billion you will attract some advertising but they haven't made a hit on madison avenue. they failed with home. they tried to make the graphic interface the thing that pops up on your mobile. didn't work. nobody bought it. >> madison avenue, i mean, anyone that's selling into madison avenue, they want to see one or two quarters. they have just come out basically with a new platform. madison avenue will not buy a new platform in the first quarter. >> it's very tough to sell advertising on mobile. you can't put commercials on. you have to have content-driven advertising, sponsorship. everybody else is doing a lot in that space. facebook is doing next to nothing. >> what would you need to see to own the stock? >> you're also saying do not buy this stock. >> i don't think it's going to
12:43 pm
go anywhere near time. i think maybe it will get back up to $28 or $30 in a year because they are reaching into developing markets with a feature phone product that's a simplified facebook. they're going to find big markets in india and brazil and indonesia, but they're not in china to any extent. they don't really have advertising capability in those markets. so i think that it's a hold or basically a walk away from unless they get some real serious management in there that knows how to monetize the -- >> those are strong words. >> here is one of the things i know you speak to a lot, that is what's going on in terms of, you know, their outreach to the advertisers and so forth. google has got a huge sales force out there. how long is facebook's? >> i was with sir martin sorel, wp p. he spends two weeks a year with goggle management, integratie
12:44 pm
google. he's never been invited to facebook. why not? >> i'm glad you mentioned google. we want to go to jon fortt live in san francisco with some breaking news regarding google and the event it's holding today. jon? >> yeah. hey, scott. we've got what we expected. a new nexus 7 tablet with faster qualcomm processor inside, higher resolution screen, up to 320 ppi. also it's got 1080p streaming partnership with netflix on that right off the bat announced. upgrading to google play store. there's a new area, a new app for games specifically. clearly twrii lly try tock chas apple's lead in the game space. this is about android. chrome. more announcements coming on the chrome front. google executives are here. going to get some interviews as
12:45 pm
the event wraps up. google is selling this on the cheap. it's a seven-inch tablet at $229. 100 bucks cheaper than the ipad mini, but still the ipad way out ahead. google trying to close that gap here and make the argument that android tablets in general are catching up there. also note asus ceo here. making the new nexus 7. >> jon, thanks so much. jon fortt live for us in san francisco. porter, google $1,000, blessing, curse? >> i think google is one of the best managed company in the business. they're on top of everything. they changed ad sense a week or two ago to address the cost per click in mobile. they're going to announce on monday that they're going to make you buy tablets, pcs and phones if you buy an ad in ad
12:46 pm
sense. that's going to really help boost the cost per click. >> do you buy the stock at 900 bucks. >> i think it has room to grow. >> porter bibb, thanks. up next, the hidden business of economic data. eamon javers uncovers another way wall street has rigged the trading in their favor. this when we come back. you make a great team.
12:47 pm
it's been that way since the day you met. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help
12:48 pm
for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. bjorn earns unlimited rewards for his small business. take these bags to room 12 please. [ garth ] bjorn's small business earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less? ahh, oh! [ garth ] great businesses deserve unlimited rewards. here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what's in your wallet? [ crows ] now where's the snooze button?
12:49 pm
good afternoon, everyone. coming up top of the hour on "power lunch," president obama is set to give a major speech on the economy laying out his vision to fire up the u.s. economy, regain some of the momentum in that department. now, we're going to take his speech live and we're going to discuss what impact it's going to have on the markets. will it help or hurt stocks? and what now? will the president's agenda affect your taxes? scott, back to you. >> ty, thanks so much. see you at the top of the hour. eamon javers have been leading the charge on the way market moving data is released and who it benefits. he joins us live from washington, d.c., with the latest on another example. >> the more you look at this process of releasing market moving economic data, the more you find that behind the scenes it's a lot more complicated than you might think and there's a lot more money changing hands
12:50 pm
than you might think. the latest example is the national association of realtors which tells cnbc that it actually sells early access to its market moving data as much as 90 minutes in advance to paying clients, but the key is the paying clients are not data themselves to their own clients until the actual release time of 10:00 a.m. the national association of realtors telling cnbc that it's got three paying clients including one firm that it describes as primarily a trading firm that buy access to the data right near 10:00, and they can do what they want with it at that time because that's the release time, so the national association of realtors telling us they don't make a whole lot of money on this service themselves, though the resellers, the data services themselves might do that. here's the statement to us. the revenue we receive is only a bare fraction of the production costs. we have a big net loss of
12:51 pm
viewing in financial terms. the agreement with one of the data vendors is essentially a trade. we provide them our data in exchange for access to their services. i can tell you all of this is part and parcel of this telecommunications arms race we've been showing on your wire now. standing in front that have building here in washington where they have server farms and microwave towers designed to get the information out of washington up to where you guys are in new jersey for trading. once that information leaves some of these market moving data providers offices, there's a real race to get it right to the trading services as fast as they can within milliseconds and that's what it look like here. >> eamon javers, as eamon is talking dr. j is shaking his head. >> i think we all are. >> had some examples and i know all of you watching probably feel the same way. i mean, it's yet another argument, money versus morality. >> yeah. >> what is right versus who is
12:52 pm
making what to provide the data to whom, and who pays the ultimate price? >> you and you. >> exactly. all of you. >> that's exactly right, again, kudos to eamon for ferreting this out, but when you've got an announced release time for data, not against somebody doing data and mining through it to figure out, you know, that there's a little bit of this or a little bit of that, bullish or bearish, but if you say that your data comes out at 10:00 when in fact it comes out 90 minutes earlier or nine milliseconds earlier than that, you've lost me in terms of your morality. it's not right. it's not fair. >> all right. today on big data download who is chowing done on all the fast food? in terms of spending, oklahoma, arkansas and kansas see the most amount of money being spent on the likes of mcdonald's and others. who is on the bottom of that last? find out bigdata.cnbc.com. just moments away from president obama's address on the economy. we're going to bring that to you
12:53 pm
as soon as it begins, plus you asked for it. we're trading the stocks that you asked about on twitter as well. when we come back. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. ♪ [ male announcer ] it's a golden opportunity to discover the heart-pounding exhilaration beyond the engineering. ♪ come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles,
12:54 pm
including the gs and all-new is. ♪ this is the pursuit of perfection.
12:55 pm
in just a few moments president obama is going to deliver the first in a series of speeches on the economy in his home state of illinois. cnbc's chief washington correspondent john harwood is here. what are we expecting? this comes as the recovery
12:56 pm
certainly isn't nearly as rebust as we'd like. unemployment rate is stubbornly high, and the approval rating is seems to be dropping. >> trying to make the long-term play to win the argument that it's at gridlock with the congressional republicans. is the way to prosperity to cut taxes, cut regulations or invest in job training skills and education? that's the argument he's making. you may not see the success in his presidency. the determination and test will come long term. >> we'll see what happens. it will begin any minute now. the president speaking out at knox college in his home state of illinois. final trades when we come back. . try new alka seltzer fruit chews. they work fast on heartburn and taste awesome. these are good. told ya! i'm feeling better already. [ male announcer ] new alka seltzer fruits chews. enjoy the relief! [ lighter flicking ]
12:57 pm
[ male announcer ] you've reached the age where giving up isn't who you are. ♪ this is the age of knowing how to make things happen. so, why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to your doctor. if then schwab is the placeing your trato trade. higher level, this is the age otdd#: 1-800-345-2550 call 1-888-284-9410 or visit schwab.com/trading to tdd#: 1-800-345-2550 learn how you can earn up to 300 commission-free online trades tdd#: 1-800-345-2550 for six months with qualifying net deposits. tdd#: 1-800-345-2550 see how easy and intuitive it is to use tdd#: 1-800-345-2550
12:58 pm
our most powerful platform, streetsmart edge. tdd#: 1-800-345-2550 we put it in the cloud so you can use it on the web. tdd#: 1-800-345-2550 and trade with our most advanced tools tdd#: 1-800-345-2550 on whatever computer you're on. tdd#: 1-800-345-2550 also, get a dedicated team of schwab trading specialists tdd#: 1-800-345-2550 who will help you customize your platform tdd#: 1-800-345-2550 even from the comfort of your home. tdd#: 1-800-345-2550 and talk about ideas and strategies, one on one. tdd#: 1-800-345-2550 get all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 call 1-888-284-9410 or visit schwab.com/trading tdd#: 1-800-345-2550 to open an account. tdd#: 1-800-345-2550 and learn how you can earn up to 300 commission-free tdd#: 1-800-345-2550 online trades for six months with qualifying net deposits. tdd#: 1-800-345-2550 our trading specialists are waiting to help you get started. tdd#: 1-800-345-2550 so call now. tdd#: 1-800-345-2550 at farmers we make you smarter about insurance,
12:59 pm
because what you dont know can hurt you. what if you didn't know that it's smart to replace washing-machine hoses every five years? what if you didn't know that you might need extra coverage for more expensive items? and what if you didn't know that teen drivers are four times more likely to get into an accident? 'sup the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum -bum ♪ welcome back. it's time now for our final trades. pete? >> saic, this name is going higher. a lot of call activity. >> stephanie? >> cisco. >> dr. j. >> gamestop, a lot of buying?
1:00 pm
simon baker? >> all right. two brothers squared off a short time ago and the people have spoken, and the doc won the debate on zynga. >> dr. j is the winner. that does it for us. catch more "fast money" tonight at 5:00 p.m. follow me on twitter@scottwapnercnbc. have a great rest of the day. "power lunch" starts right now. indeed it does, scott, and we begin with breaking news. welcome to "power lunch," everybody. i'm tyler mathison with sue herera and we begin with the news of the president set to give a major speech on the economy any moment now. it's the first in what is to be a series of back-to-back speeches over say the next 48 hours. the president laying out his agenda to fire up the u.s. economy. it comes on the heels of a new nbc poll that shows that only 45% of americans approve now of his performance. >> john harwood, of course, is with us from

8 Views

info Stream Only

Uploaded by TV Archive on